Commentary

Goldman, Bloomberg and crony capitalism

Commentary: Occupiers arrested, but Mayor Mike dines with Goldman

By

DavidWeidner

NEW YORK (MarketWatch) — If ever there was an opportunity for Occupy Wall Street to re-energize and awaken from its winter slumber, it is the let-them-eat–Shake Shack lunch of New York City Mayor Michael Bloomberg and the chief executive of Goldman Sachs Group Inc.

“Bloomberg visited Goldman Sachs Group Inc.’s
GS, +1.63%
headquarters in Manhattan in a show of support after a departing employee [Greg Smith] publicly criticized the firm’s culture yesterday,” according to a Bloomberg News report.

Reuters

New York City Mayor Michael Bloomberg

“ ‘The mayor stopped by to make clear that the company is a vital part of the city’s economy, and the kind of unfair attacks that we’re seeing can eventually hurt all New Yorkers,’ said Stu Loeser, a spokesman for the mayor.”

The mayor also ate lunch with Goldman CEO Lloyd Blankfein at Shake Shack. For those who don’t know, that restaurant is the creation of celebrity chef Danny Meyer. With a plain burger starting at $4.55 and going as high as $8.60, Meyer, whose restaurant empire also includes Union Square Cafe, the Modern and Maialino, has become a kind of gilded Ronald McDonald in Manhattan. Read full story on Bloomberg’s visit to Goldman Sachs.

There’s just so many things wrong with Bloomberg’s visit, it’s hard to know where to begin.

Whether or not you support the Occupy movement, it’s stomach-turning to think about the NYPD ripping up camp sites, spraying mace and manhandling the disenfranchised, while the mayor dines with a Wall Street CEO who not only bet against U.S. homeowners in the mortgage meltdown but structured deals for his favorite billionaire clients, only to shaft investors on the other side of the deal.

“There’s an awful lot of people at Goldman,” the mayor said, according to the New York Observer. “They work very hard, they pay taxes, they live in this city, and we want to have more companies come and locate here.” Bloomberg later added: “It’s my job to stand up and support companies that are here in this city that bring us a tax base, that employ our people, and I’m going to do that.”

You can seen the mayor’s argument: His job is to attract business. Forget what those businesses do.

Bloomberg’s real constituents

Bloomberg’s problem has always been the blind eye he turns to Wall Street. Some might argue that it’s a conflict of interest for a mayor who built a fortune on selling information and business news to the industry is now an elected official with those former clients under his jurisdiction, despite his claims that he’s sequestered himself from Bloomberg L.P.

But this is what happens when Wall Street titans are allowed to overturn rules about term limits and basically spend the competition into submission. Even after pouring $90 million into the last mayoral election, Bloomberg only won 51% of the vote to best the 46% won by someone named William Thompson Jr.

Clearly, the percentage that counts for Bloomberg is the 1%.

He’s spent much of his third term unabashedly apologizing for Wall Street. Between 2008 and 2011, there were 5,456 foreclosures in Mayor Mike’s city. Most of them were in Brooklyn, not Manhattan’s tony Upper East Side or Upper West Side. See the state comptroller’s 2011 foreclosure report.

You might think that’s not a lot, but consider that most people in New York rent. So, the foreclosure rate was actually 2.9% — higher than the national average for homeowner-occupied homes.

Unless I missed it, I don’t remember Bloomberg taking any of them out for a gourmet burger.

Occupy Wall Street may not be as vibrant and novel as it was last fall, but Bloomberg’s Shake Shack moment presents an opening. The NYPD, running amok after the courts failed to rein it in, raided Zuccotti Park again Thursday as hundreds of protestors converged to mark the movement’s six-month anniversary. Seventy-three occupiers were detained.

Given chance after chance to redefine itself and sharpen its focus, Occupy may finally be on the verge of doing something more productive than irritating neighbors, being a health hazard, and calling for the elimination of all world debt.

Organizers are trying to focus on issues such as student debt, and they’ve aligned the movement with politicians including Senate candidate Elizabeth Warren in Massachusetts and Hakeem Jeffries, who is running for Congress in Brooklyn.

Most Americans should consider giving the Occupy movement a pass for its listless recent activity. If winter wasn’t enough, repression by police and local politicians beholden to corporate interests has also taken a toll. But spring is here. School is almost out. And there’s a national election in November.

If the movement is as hungry as it professes, it needs to get its act together. If the mayor is dining on gourmet burgers and telling millionaires to keep a stiff upper lip, occupiers need to slap them in the mouth and eat their lunch.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information.
All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only.
Intraday data delayed at least 15 minutes or per exchange requirements.